Auto Component Sector Records 12.5% Revenue Growth In FY26

The Indian auto component manufacturing industry has demonstrated strong financial health, recording a 12.5% year-on-year revenue growth in FY26. This performance was driven by healthy volume growth across various vehicle segments and an optimized product mix. Total revenue for listed auto ancillary firms has nearly tripled over the past decade, reaching an estimated ₹5 lakh crore in FY26, compared to ₹1.7 lakh crore ten years ago.

Looking ahead, domestic Original Equipment Manufacturer revenues for auto ancillaries are projected to grow by 8-10% in FY2026, while the replacement market is expected to see revenue growth of 9-11%. To support this expansion, the industry is planning a significant capital expenditure of ₹20,000-25,000 crore throughout the current fiscal year, signaling strong confidence in long-term demand despite current economic headwinds.

Despite the positive growth trajectory, the sector faces immediate challenges from commodity inflation. Rising costs of copper, aluminum, steel, rubber, and crude-linked inputs, combined with increased freight and energy expenses, are expected to exert significant margin pressure in the first quarter of FY2026-27. Companies will need to manage these input costs carefully to maintain their current profitability levels as they navigate the remainder of the fiscal year.